It’s been another exciting week for Bitcoin. The corporate support just keeps on coming, and this is raising questions about whether Bitcoin can really go Main Street, and what the implications are for the digital currency’s value. America’s oldest bank – BNY Mellon – will start financing Bitcoin and other cryptos, it was announced this week.
It’s a big deal since BNY is the first big national custodial bank to offer custody services for crypto assets. You have to assume this is not for your average checking account but for big institutional-level financing.
Is Bitcoin going mainstream?
The news comes hot off the heels of Tesla’s $1.5bn Bitcoin investment of course. Yet more ‘mainstreaming’ and corporate support.
“The question is: the more suits take over this space, what happens to regulation,” queried Markets.com analyst Neil Wilson this week. “More corporate adoption equals more regulatory oversight. Whilst it was fine to let Bitcoin be when it was used for money laundering and drug running, it’s another story when the likes of BNY are offering custodial services.”
MasterCard also announced this week that it will start supporting some cryptocurrencies this year. This follow’s PayPal’s big announcement last year, which stoked the bull market in the fourth quarter. The PayPal move was widely regarded by analysts as an important step forward for Bitcoin, as it demonstrates building corporate support. MasterCard only cements this view and the dam has burst in terms of institutional interest and demand.
“We already know that Visa, Mastercard, and PayPal are all racing to get as many crypto related services online as soon as possible, but I’m not sure what we’re able to learn from this latest announcement,” said Mati Greenspan, CEO of Quantum Economics. “They already offer a credit card that lets people transact using their digital currencies, so now it seems they’ll make it easier for merchants to accept them. Honestly, this seems like a recycled headline to me. We’ll just need to wait and see exactly how easy they make things and apparently, which cryptos they embrace will also be of some importance.”
Key Bitcoin numbers from DealAid
- 60.2% of consumers would like more companies to accept Bitcoin as a payment method.
- Amazon, Apple and Walmart are the top 3 companies that consumers want to see accept Bitcoin.
- 50.5% of consumers are willing to pay for products and services with Bitcoin.
- Ethereum and Doge are the most popular alternatives to Bitcoin as a payment method.
Bitcoin’s price action has been spectacular this week – it was trading at $37000 last week and then surged to hit a first peak of $48,213 on 9 February and then a second peak of almost $48,700 on 11 February. It seems to be testing that level as the market awaits further news of adoption by other institutions.
Simon Peters, cryptoasset analyst at multi-asset investment platform eToro, says this is an area to pay close attention to:
“The cryptoasset world is bursting into the realms of traditional finance at a staggering pace…Mastercard is the operator of the second-largest network of credit cards in the world, and for a business of that size to be making this decision shows the long-term trend for cryptoasset adoption. While we may see short-term upside in the price of Bitcoin and other cryptoassets as a result of this, Mastercard’s announcement – coming so soon after Tesla’s own comments earlier this week – has real long-term implications for bitcoin and its peers.”
Peters reckons that Bitcoin and its peers are, quite simply, going to be part of the mainstream financial universe sooner rather than later. He says he expects demand to surge and to see Bitcoin prices hitting at least $70,000 by the end of this year. Let’s just hold our breaths and wait and see what happens next week!